Ford Motor Co. could be liable for $100 million or more in reimbursements to California customers who spent their own money replacing a faulty ignition part found in several millions of the company's 1983-95 models, a Northern California judge has ruled.
Alameda County Superior Court Judge Michael Ballachey--who last year ordered an unprecedented recall of 1.7 million Ford cars and trucks in California equipped with the so-called thick film ignition module, or TFI--approved a broad reimbursement proposal this week as part of the ongoing case.
Lawyers for the plaintiffs said the reimbursements could go to 500,000 or more people. But it remains to be determined just who would be eligible and how much Ford should have to pay for each defective part.
Additionally, Ford has said it intends to appeal the October decision that made possible this week's reimbursement order.
Ballachey issued the first court-ordered recall in auto industry history in October after concluding Ford had concealed a safety defect. The thin film ignition modules, Ballachey ruled at the time, made the Ford vehicles prone to stalling because their placement on the distributor exposed them to excessive engine heat that weakened them and made them vulnerable to failure.
The TFI module regulates the flow of electrical current to spark plugs. From 1983 to 1995, Ford installed it in about 22 million Ford, Lincoln and Mercury vehicles, more than half of which are still on the road. Ford used the device on 29 models including the Taurus, LTD, Ranger, Bronco, Mustang and Escort.
Other manufacturers also used the same type of module, but plaintiffs' attorneys said Ford's decision to mount the device on the distributor exposed it to excessive heat.
Although Ballachey's jurisdiction is limited to California, similar class-action suits are pending in Alabama, Maryland, Illinois, Tennessee and Washington.
Ballachey had said in his October ruling that Ford must replace the devices or repay California customers who already had paid for replacements on their own.
This week he approved a court-appointed referee's recommendation that the auto maker should pay customers the same amount it would have paid its own dealers to do the part replacement under warranty.
An attorney for the plaintiffs in the suit estimated that the amount could hit $100 million if only those who used genuine Ford replacement parts were covered by the order. The total payout could be two or three times higher if Ford also has to reimburse those who purchased aftermarket replacement parts.
A Ford spokesman said Friday that the ruling had been expected and "is just another step in a very long road."
He said he couldn't confirm or reject the $100 million figure because "we just don't know the impact right now. The ruling doesn't trigger anything because we still need hearings on how to proceed, and we've said we intend to appeal the whole case."
Ford's stock price fell 6 cents to close at $28 a share in New York Stock Exchange trading.
Bloomberg News was used in compiling this report.